Tax Alert | Tax measures expected on Dutch Budget Day 2022

The Dutch coalition government recently agreed on its 2023 budget that will be officially announced for the occasion of Budget Day on 20 September next.

Several evaluation reports and white papers on topics ranging from wealth inequality, business succession schemes and taxation of multinational have been published in the run to this year’s budget. Discussions in the coalition on the 2023 budget have been particularly challenging while realizing a political compromise on a number of sensitive policy areas and softening the financial consequences for households as a result of the gearing inflation. At the same time, an attractive business and investment climate must be ensured which requires a predictable and stable tax policy. In its search for additional income the Dutch coalition government rejected earlier the idea of a windfall tax for excessive profits realized by energy companies, but instead focused on the corporate income tax rate and wealth inequality.

This Alert highlights several of the expected tax changes to be included in the Tax Plan 2023. It is noted that other legislative proposals are expected in the second half of 2023.

Corporate income tax

• The bracket limit to be reduced from EUR 395,000 (bracket limit since 2022) to EUR 200,000, profits exceeding EUR 200,000 will be taxed against the standard corporate income tax rate of 25.8% (2022).
• There are indications that also the corporate income tax rate over the lower bracket will be increased to 19% (now 15%).

Personal income tax

• Taxation of substantial interest holders shall increase. In short, this relates to individuals holding at least 5% of (a certain class of) shares, either on their own or together with certain others. As of 2024, box 2 is expected to have two brackets. The first EUR 67,000 will be taxed at a rate of 26% and any excess will be taxed at a rate of 29.5%.
• As of 2026, a new wealth tax regime (Box 3) will be introduced. On Budget Day 2022 a transitional regime for the tax years is expected to be published.

Payroll tax

• It is proposed to maximize the basis for the calculation of the extraterritorial allowance (‘30% allowance’)to the maximum amount under the Standards for Remuneration Act (EUR 216,000 in 2022)
• Also, a reduction of the margin for the required minimum salary of substantial shareholder performing services for his company from 25% to 15% compared to a salary in a comparable employment and function.

Real estate transfer tax (RETT)

• The general RETT rate will be increased from 8% to 10.1% as of 2023. The RETT for residential properties that will serve as the principal residence for the individuals purchasing such property will remain 2% (and 0% in specific situations).